Replicate binary option

Replicate binary option

M9 1a8 8 0 1 0 0 16A8 8 0 0 0 9 1zm. Quantitative Finance Stack Exchange is a question replicate binary option answer site for finance professionals and academics. I’m actually not convinced that you can replicate a binary option with vanilla options, even with arbitrary strike prices. I don’t think you can add finite-slope combinations to get infinite slope, unless you use an infinite number of them.

The payout is discontinuous, it’s the delta that has extreme slope around the strike. When we make the delta infinitely small and assume we have arbitrary strike prices. Quite a concise answer, just to allow a few more words for the interested reader: fieldrecordings. Just want to tell you that the link is dead. Thanks for contributing an answer to Quantitative Finance Stack Exchange! Please be sure to answer the question. Provide details and share your research!

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